Petrol prices below £1/ litre

Petrol prices in some areas have fallen under £1 a litre for the first time since December last year.

The supermarket chains Morrisons and Asda announced they would cut prices by 5p, to 99.9p for unleaded and 111.9p diesel as of today.

Meanwhile some non-supermarket petrol stations in the West Midlands were also selling unleaded for under £1 per litre.

Today’s national average cost per litre of 95-RON unleaded was 106.9p, while diesel was at 118.2p.

It’s the first sign that UK forecourts are beginning to respond to falling crude oil prices. Oil prices peaked at just over $140 a barrel in July, with a barrel of Brent Crude valued at $76.54 as this story is filed.

However a spokesperson for the Petrol Retailers Association warned Autocar that fuel prices could rise again near Christmas as demand rises for the holiday season.

Ha ha! Just in time for a flood of electric, hybrid and general 'eco' cars. Talk about being wrong-footed. This is what happens when you let scum speculators drive a commodity that everyone needs to a multiple of its true supply/demand market price. There was no shortage, just forward option speculating, tankers loaded kept off-shore and naked, criminal ramping by Goldman Sachs and other banks/brokers who had lent hedge funds billions to play with the oil price whilst at the same time declaring 'the $200 barrel will be here by end of the year(2008)'; remember that?

Oil by rights should be down around $30/barrel or lower, its long-term trend price. So what happened to the excess, up to $120 per barrel or up to 40p per litre extra we all paid out in the last year or so? Well, we know the UK exchequer raked in billions in extra VAT and oil company corporation tax but what of the rest. It didn't all go to the Sheikhs. The well-head cost of a barrel is and has been for ages around $5-10. Who was raking the bulk of $100 a barrel at 80 million+ barrels a day for best part of a year? The best part of 3 trillion dollars? Perhaps that explains why some OTT, carbon lash-up from Aston Martin sells out within hours at a ticket price of £1 million.

Lastly, once the price of a litre falls back below £1 expect renewed calls from Greenpeace and many other do-gooding parasitic taxers to ramp up the fuel duty by restarting the 'escalator', so that the world doesn't melt, again. Parky innit?

At last - a sign of everything getting a bit cheaper. Just need to get the diesel below the £1 barrier too, now, seeing as it used to cost a very similar amount to petrol. This, together with the used car market being rescued, shows good signs for the future of motoring.

This may not be the last good news. This move was based on the oil price at the start of the week; it has dropped another $5 or so since then and falling. Really proves that $147 a barrel was just speculative demand

Duty is bound to go up soon, especially since the last 2 scheduled increases haven't gone ahead. Plus OPEC will cut production by the end of the year, but I'll enjoy it while it lasts. Still can't believe I'm thrilled to be paying 99.9p a litre!

Another issue I have, now the price has genuinely fallen below £1/litre is this: the last time the oil price was $68/barrel was in November 2006, and that was at the bottom of a transient "spike", the average petrol price was 86p/litre. The oil price has been below $70 for 3 weeks now and the average petrol price is 97p/litre.

Just dropped below an euro per litre here in Spain, and it was noticeable on my regular trans-Iberian journey last week that average speeds have returned to "normal" already, thus nullifying the drop in price with higher consumption.